He describes the example of two brothers – one was prudent, worked hard and lived at home with his parents. The other became a proficient gambler, and lived lavishly until he lost all his money, leading him to turn to his father to bail him out. The father couldn’t afford to pay, so he began charging the working brother rent, and told his wife they’d have to tighten their belts. The brother grumbled but paid up, but the wife told her reckless son that he would have to stop gambling, get a job, repay the money and make amends.

The point Pearson makes here is that most people are like the hard working brother – although we grumble about it, we pay up. What we need to do collectively is put our foot down, like the mother in the above example, and stop the financial sector taking risks with money. But our Governments are not providing the necessary disincentives to stop the financial sector gambling, and the sector is still attracting some of the most motivated and talented people to go and work for it, much like the reckless brother in the analogy.

There is no question of whether or not this will lead to another crisis – the question is when, not if. And in the meantime, money is used for speculation rather than providing real services, and our treasuries are able to print currency without having the productive assets to back it up. This creates a bubble where prices are fixed in theory without having anything physical to back them up or tie them to – the gold standard a thing of the past – and the gambling ends up being worth trillions of dollars on paper.

Investors are safe in their assumption that they will be bailed out if their investments do not work out, and the gamblers end up making a lot of money if they win – but crucially are not held accountable if they lose – and can look forward to a comfortable retirement courtesy of their ‘golden parachutes’, a further disincentive to responsible behaviour. With no ‘mother’ putting her foot down on this speculation and gambling, the rest of us are left grumbling whilst we hand over our tax monies.

The paper will be published on September 5th and looks at the core values which must underpin CSR programmes if they are to be effective.

On April 20th, 2010 an explosion on the Gulf of Mexico Deepwater Horizon oil rig exposed the United States to an historic ecological disaster.

This episode illustrates the limits of CSR programmes currently undertaken by global businesses. The logical rules and regulations which business and government leaders created did not work to exemplify the broadly shared social values that US society deemed to be important. Representing our deeply held values and the metaphorical expressions of our beliefs, these accountability structures must change over time to continue to align with prevailing beliefs and core values. This global CSR failure also reflects the dynamic process which CSR programmes must undergo over time.

Emerging markets can also learn a valuable lesson from this case study as they continue on their path of economic development. Their CSR programmes should also reflect their own cultures’ unique social norms and be dynamic enough to respond to unprecedented threats due to increased stakeholder scrutiny and constraints on environmental and other resources.

Exploring this case study provides important theoretical lessons for companies in emerging markets and elsewhere to consider. For instance, can increased regulation prevent corrupt or unaccountable corporate practices? Are voluntary systems of accountability fundamentally flawed and fuelled only by corporate disdain for regulation? And to what extent should markets be allowed to dictate the course of play vis-à-vis the more arm’s length yet expensive bureaucracy created by government regulation?

Corporate responsibility cannot be practiced if various personal attributes do not exist in the individuals within the company. These consist of the four pillars of leadership, ethics, personal responsibility and trust, all of which are dynamic in nature. Incorporating these personal qualities can help improve the planning and practice of CSR programmes as well.